Hike in 'sin taxes' brings spirited debate

By Ken Dixon, STAFF WRITER

Published 3:02 am, Tuesday, September 1, 2009

HARTFORD -- The competing budget proposals in Hartford not only divide Democrats and Republicans over higher income taxes for the wealthy, but smokers and non-smokers, as well as the factions within the Connecticut liquor industry.

The issue is "sin taxes," which to varying degrees, majority Democrats and Republican Gov. M. Jodi Rell want to hike to help bridge the $8.5-billion deficit in the two-year budget period that began a month ago.

Senate President Pro Tempore Donald E. Williams Jr., D-Brooklyn, said Friday that Rell's proposal to raise the excise tax on beer, wine and distilled spirits by 10 percent to raise about $8.5 million over the biennium essentially begs the question on the need for hefty revenue increases.

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"It is unfortunate that Govenor Rell is proposing tax increases on working men and women, and businesses -- but letting our wealthiest residents take a walk," Williams said. "She is taxing the six pack but not the six-figure salary. This is not shared sacrifice. This is Republican-style trickle down economics."

The Democratic proposal would raise the 5-percent income-tax rate up to 7 percent for high-income families to generate about $1.2 billion over two and a half years going back to January.

Democrats would not raise alcohol taxes, but would hike the $2-per-pack tax on cigarettes to $2.75 to collect about $142 million over the biennium.

Higher taxes on other tobacco products would raise more than $2 million over the budget period. In July of 2007, the tax jumped from $1.51 to $2.

Rell wants to hike the cigarette tax to $3 a pack, to raise $227.4 million over the two years, plus another $4.1 million on other products, such as snuff and chewing tobacco.

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The state MATCH coalition -- Mobilize Against Tobacco for Children's Health -- cites numerous studies that indicate higher cigarette taxes have a direct effect on smokers, discouraging more children and pregnant women to smoke.

The tobacco industry warns that higher cigarette taxes, paid mostly by low and middle-income smokers, will not fix the state's deficit. "Smokers already pay more than their fair share of taxes," said John W. Singleton Jr., director of communications for Reynolds American Inc.